The Prime Minister of Equalia Has Called for the Nation's

question 76

Multiple Choice

The prime minister of Equalia has called for the nation's legislators to enact new legislation designed to shift the country away from socialism toward a more capitalistic system. The prime minister acknowledges that some citizens will be unhappy with the radical changes. The most likely source of dissatisfaction with a move toward capitalism is

• A) decrease in wealth.
• B) people will have less economic freedom.
• C) tax rates will have to increase.
• D) a trend toward unequal distribution of wealth.

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Definitions:

Demand Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with high elasticity indicating a significant response.

Inelastic Demand

Refers to a situation where the demand for a product does not significantly change with a change in its price.

Elastic Supply

A condition where the quantity supplied of a good changes significantly due to a slight change in its price.

Subsidy

A financial aid or support extended by the government to an economic sector, business, or individual, often aimed at promoting economic and social policies.